### Calculating Cash Discounts and Net Amount PaidComplete the following by calculating the cash discount and net amount paid. (If more than one discount, assume date of last discount.)| Gross amount of invoice (freight charge already included) | Freight charge | Date of invoice | Terms of invoice | Date of payment | Cash discount | Net amount paid ||-----------------------------------------------------------|----------------|-----------------|------------------|-----------------|---------------|-----------------|| $600 | None | 8/12 | 2/10, 1/15, n/30 | 8/24 | | |#### Explanation- **Gross Amount of Invoice**: The total invoice amount, including any freight charges.- **Freight Charge**: Any additional transportation cost associated with the delivery.- **Date of Invoice**: The date when the invoice was issued.- **Terms of Invoice**: Describes the discount available if the payment is made within a specific period. For example, "2/10" indicates a 2% discount if paid within 10 days.- **Date of Payment**: The actual date when the payment was made.- **Cash Discount**: The amount reduced from the gross invoice amount if conditions are met.- **Net Amount Paid**: The total amount paid after accounting for any cash discount.Given the terms "2/10, 1/15, n/30", payment made on 8/24 qualifies for a 1% discount since it is within 15 days of the invoice date (8/12). The calculation needs to be conducted accordingly to find the cash discount and the net amount paid.

Cash discount is given if the purchasing copany pays the receipt within the sipulated period. Here, a cash discount of 2% will be given if the payment is done in 10 days or else a discount of 1% if the payment is done in 15 days. o discount further is provided but full payment should be done in 30 days.Date of invoice is 8/12 and date of payment is 8/24. It means payment is done on 12th day. Hence, a discount of 1% will be given on the invoice. Cash discount = Gross amount of invoice×1%=$600×1%=$6 Net amount paid is the gross amount minus the cash discount: Net amount paid = Gross amount - Cash discount=$600-$6=$594 Answer: Cash discount : $6.00 Net amount paid = $594.00

Answered: Complete the following by calculating…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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